Best Bitcoin Trading Platforms
Getting Started with Bitcoin Trading
Trading Bitcoin is really exciting, and offers a wide range of advantages over something like forex trading. Peer to peer markets mean you can often enjoy lower fees and can trade securely in the knowledge that the odds aren't stacked against you by the advantages given to large financial institutions. For a regular retail investor trading on the traditional financial markets often feels like betting at a casino - the house always wins in the end - but this is not the case for digital currency markets.
The volatility of Bitcoin means that the risks are high, but so are the potential rewards. This makes for very exciting experience and could even make you rich even if you only start with a modest amount of trading capital. But of course it also means that you can lose a lot of money in a short space of time - especially if you are trading with leverage.
If you are confident that you understand the risks and you are only going to trade with money you really can afford to lose without causing yourself any problems then read on and you will find some of the best trading platforms and sites to get you started.
Of course you will also need to keep up to date with the latest trading analysis and investment news, so check out this site which provides a twice daily digest of the latest Bitcoin Trading News Headlines
Are You an Experienced Trader?
Bitfinex is the only Bitcoin trading platform which not only allows you to access 'leverage' with margin trading, but also to use your funds offer liquidity liquidity to others in return for a set interest fee.
The Bitfinex margin trading feature allows you to effectively trade as if you had more money than you really do have, therefore increasing your profits when you make a winning call, and increasing your loses when you make a losing call. For example, if you put up $100 USD to take a 'long' position on Bitcoin with 10 times leverage, and the price of Bitcoin then rises by 5%, rather than simply taking a profit of $5 which would be 5% of $100, you actually a profit of $50. To do this the system borrows USDs from liquidity providers and uses them to buy Bitcoin. To protect the liquidity provider, your long position will automatically close before you lose all of your own $100 trading capital.
This kind of margin trading increases your potential rewards, but also your risks. Anyone wishing to make a safer investment can instead use their USD or Bitcoin funds to provide liquidity. To do this you place an offer on the market stating how much you want to make available, how long for, and what return you would like to get.
In addition to Bitcoin, the Bitfinex site also offers Litecoin trading.
Kraken offers one of widest ranges of advanced options for trading Bitcoin, Litecoin, Dogecoin, Ripples, and other digital currencies which can all be traded against each other, or against USD or Euros.
In addition to simple market and limit orders, Kraken traders can set up orders to automatically buy or sell at a certain percentage or rate above or below market price. All trades can be set to automatically close at a certain profit, which can be set as a percentage or fixed amount. You can also set stop loss, trailing close, and other automated options.
Leverage trading and a Ripple gateway option are both planned for the future, but no timeline for these features has been set yet.
Kraken also features a sliding scale of fees, meaning that regular users who trade enough to hit the targets will see their trading costs reduce in steps. With fees on some markets starting at a low level of 0.1% anyway, this offers the potential for virtually free trading.
Coinsetter is the first Bitcoin trading platform to specifically target institutional investors and traders with a large amount to spend. They offer the deepest orderbook on the market, meaning that large trades can be made without having to buy or sell a long way from the fair market price. This is achieve by integrating the native orderbook with those of other exchanges, effectively allowing traders to access many of the most popular exchanges simultaneously.
BTX Trader offers a range of advanced order types including stop loss and trailing stop orders.
One unique feature of BTX trader is 'hidden orders'. This means that you can place a limit order on the market which will not be seen by other traders. This is useful in thin markets (markets with less volume and liquidity) such as Bitcoin because a large order can actually move the markets significantly, and the trader placing the offer may not want to do this. Hidden orders allow large offers to be placed on the market without influencing other traders.
If you are interested in trading Bitcoin against other digital currencies, rather than against fiat money like USD or Euros, then Cryptsy offers the widest range of options.
Many traditional trading platforms are now starting to jump onto the digital currency bandwagon and offer Bitcoin ETFs, or electronically traded funds.
These ETFs offer leveraged trading through which you can take both long and short positions on Bitcoin's price.
You should be aware that these funds are for day trading only, which is when you open and close a position (a bet on the price going up or down effectively) on the same day. They are no use for taking long term positions.
My personal recommendation if you want to go down this route would be to use Plus 500, who have ETFs for both Bitcoin and Litecoin, and offers generous welcome bonuses to new traders - including a small 'no deposit bonus' which lets you try out the system with real money and potentially make real profits without even having to put any of your own money at risk.
Other Useful Bitcoin Trading Links
- Bitcoin Trading News
A twice daily digest of the top bitcoin and cryptocurrency trading news from all around the internet. Online and via email.
- How To Hedge Against Risk When Investing in Bitcoins
If you own Bitcoins you can reduce the risk of losing money by using a hedging strategy to hedge against various categories of risk.
- Bitcoin Alternatives: The Best Cryptocurrencies for ...
Alt coin investment - the best cryptocurrencies to invest in as an alternative to Bitcoin in 2014.
- How To Make Money Trading Alt Coins
A beginner's guide to how to make money trading alt coins; virtual currency trading is more profitable than traditional markets like forex - and more fun too!